REUTERS | David Mdzinarishvili
March 4, 2020

Government response to Construction Act and retentions consultations

It is almost 30 months since Jonathan wrote about BEIS’s consultation on the 2011 amendments to the Construction Act 1996. As I’m sure everyone knows, the amendments were introduced by Part 8 of the LDEDC Act 2009. A couple of months later, Jonathan followed up on his initial piece and also wrote about BEIS’s consultation on cash retentions, which was running in parallel.

Fast forward to February 2020 and the government has finally published a summary of the responses to the Construction Act 1996 consultation and the cash retentions consultation. As adjudication doesn’t really feature in the context of cash retentions, I thought I’d focus on the comments in relation to adjudication in the Construction Act 1996 consultation. Continue reading →

REUTERS | David Mercado
February 28, 2020

Prevention, not intervention – the rail sectors’ quest for dispute free delivery

For many in the construction industry there is a degree of inevitability that a commercial dispute will arise during the delivery of their project. It’s a view that has some substance as the industry is still seen as adversarial and divisive, with complex, protracted and costly disputes being something of the norm.

However, over the years UK construction has been encouraged to take steps to address its adversarial nature and collaborate. Calls for integrated approaches from the likes of Sir Michael Latham, Sir John Egan and Sir Roy McNulty, and more recent collaborative working principles defined through BS 11000 and ISO 44001, are all designed to reduce the propensity and corrosive consequences of disputes.

In parallel, less lofty routes that seek prompt resolution of disputes have developed and the industry has an established maturity and expertise in a range of early intervention and alternative dispute resolution techniques. However, given the unprecedented levels of investment, both private and public sector clients need to shift their focus from remedies and contractual defences to techniques that decrease the likelihood of disputes arising in the first place.

Put simply, the industry needs to better explore tangible techniques for dispute avoidance. Continue reading →

REUTERS | Peter Cziborra
February 26, 2020

I tort I was covered? Management companies procuring maintenance works – a common pitfall

Tenants and building owners frequently devolve management of their repair and maintenance responsibilities to management companies, who often enter into agreements with contractors for the repair and maintenance of the buildings they manage.

This can be an attractive prospect from an administrative point of view, keeping such contractual arrangements at arm’s length from an occupier who lacks the resource, expertise or appetite to manage and monitor such relationships.

However, devolving responsibility for entering into maintenance contracts is not without risk if no provision is made for recourse should things go awry as illustrated by the recent first instance case of John Innes Foundation and others v Vertiv Infrastructure Ltd. Continue reading →

REUTERS | Mohammad Ponir Hossain
February 21, 2020

Mediation update: will courts soon be ordering parties to mediate?

In 2013, Sir Alan Ward in Wright v Michael Wright suggested that it is perhaps time to review the rule in Halsey v Milton Keynes that to oblige truly unwilling parties to refer their disputes to mediation would be to impose an unacceptable obstruction on their right of access to the court.

Sir Alan wondered whether some bold judge would perhaps accede to an invitation to rule on the questions he raised about Halsey (including whether what was said was obiter) so that the court could look again at Halsey in the light of (what was in 2013) ten years of developments in this field.

Seven years on, despite much mention of Halsey, no one has taken up Sir Alan’s invitation. However, two recent cases indicate that this may soon happen. Continue reading →

REUTERS | Thomas Peter
February 18, 2020

The Terminator’s dilemma

The jurisprudence on the effect of termination on the recoverability of liquidated damages for delay has many things in common with the Terminator film franchise. First, both began ages ago and seem likely to run on and on forever. Second, the instalments in each are of variable quality and sometimes appear to have been produced in ignorance of what came before. Third, each concerns a “Terminator”: an antagonistic figure resolved to bring things to an abrupt end, whether that be via (i) terminating a contract or (ii) the remorseless annihilation of all human life.  Continue reading →

REUTERS | Toby Melville
February 18, 2020

Can parties to adjudication in Scotland raise any legitimate defence to a money claim?

At the moment, we seem to have more Scottish than English adjudication enforcement judgments to talk about. I’m not entirely sure why that is, although I’ve heard the TCC is re-directing some adjudication enforcements to the County Court in the Central London Centre. That may be better for the parties if they get an earlier hearing date, but it means fewer published judgments, which isn’t so great for those of us who regularly blog about these things!

So, I turn to Lord Clark’s judgment in Field Systems Designs Ltd v MW High Tech Projects UK Ltd, where the issues were whether the adjudicator had failed to exhaust his jurisdiction and/or give adequate reasons and, if he had, was it a material breach of the rules of natural justice.  You may recall these issues also popped up in another Scottish judgment (Babcock Marine (Clyde) Ltd v HS Barrier Coatings Ltd), which Matt looked at earlier this year.

Continue reading →

REUTERS | Denis Balibouse
February 12, 2020

Crumbling edifices (again) – defective new homes and the “insurance” problem

You don’t have to be an avid reader of specialist construction magazines to know that the quality of new build housing is a big issue at the moment. Both the national press and social media are awash with stories (often sensationalised) of defects, cracks, subsidence, fire safety issues and all manner of other problems. The housebuilding industry is firmly in the spotlight.

New home buyers have always taken comfort from what is generically known as “NHBC cover”. That is, the 10-year insurance backed warranty schemes offered since 1936 by the NHBC and more recently by a range of other companies including Premier, Checkmate and BLP Insurance. Of course, a primary driver for taking out these warranties is that they are required by mortgage lenders who are members of UK Finance (previously the Council of Mortgage Lenders) in order to obtain a mortgage on a new home. However, they are also seen as a valuable form of consumer protection and have always been marketed as such by the NHBC and others.

Against that background, the Court of Appeal’s recent decision in Manchikalapati v Zurich Insurance plc makes depressing reading. I won’t rehearse the sorry tale that gave rise to the litigation, since this is well summarised in Charlie Thompson’s blog.  My focus is on the reaction of Zurich (and its successor, East West Insurance Company) when faced with the claim, and its efforts – apparently now heading to the Supreme Court – to avoid paying out under the policy. Continue reading →

REUTERS | Jose Cabezas
February 4, 2020

The devil may be in the detail of adjudicator appointments

As last year drew to a close, Lord Doherty handed down an adjudication enforcement judgment in Babcock Marine (Clyde) Ltd v HS Barrier Coatings Ltd, which was concerned with whether the adjudicator had failed to give reasons or failed to exhaust his jurisdiction. There was also an issue over whether there had been a material breach of the rules of natural justice and it is this latter point I’m going to look at today. Continue reading →

REUTERS | Hannah McKay
January 27, 2020

FIDIC 2017: two years on

Last month I attended the FIDIC International Contract Users’ Conference in London, two years after the formal launch of the 2017 Red, Yellow and Silver Books. I wanted to find out whether anyone was using them and if so, what did they think? In my blog following the 2017 launch, I made some initial observations. In this blog post, I consider how far these hold true. Continue reading →

REUTERS | Stefan Wermuth
January 22, 2020

Court of Appeal interprets liability cap in a new home warranty

On 5 December 2019, the Court of Appeal handed down its judgment in Manchikalapati and others v Zurich Insurance plc and East West Insurance Company Ltd. The underlying case concerned a large block of flats in Manchester that were seriously defective.

There are a number of lessons to learn from the Court of Appeal proceedings and much that is of use for construction and insurance practitioners alike.
Continue reading →